American investment bank favourite to value Northern Rock shares

Houlihan Lokey is likely to be picked to judge what compensation is owed to the nationalised bank's 180,000 shareholders

THE Treasury is close to appointing an adviser to value the shares of Northern Rock, the bank that was nationalised by the government this year. The firm chosen by the Treasury will be expected to decide how much compensation is owed to 180,000 shareholders, including several powerful hedge funds.

A short list of three firms has been drawn up by the government - they are Houlihan Lokey, BDO Stoy Hayward and LEK Consulting. The favourite is Houlihan Lokey, the American investment bank, and it is thought an appointment could be made in the next few weeks.

The "big four" accountancy firms - Deloitte, Ernst & Young, KPMG and Price Waterhouse Coopers - are not being used because of potential conflicts of interest from their frequent work in the public sector.

Northern Rock shares were trading at 90p when they were suspended on February 22, giving the bank a value of £380m. However, most